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The problems are mounting for healthcare and consumer goods company 3M (MMM), as its stock price dipped on Wednesday by almost 2%.
It was announced that the group, alongside Wolverine World Wide (WWW), will pay $54m (£47m) to Michigan property owners after a class action case was filed, claiming the companies were responsible for the release of PFAS chemicals into the environment in Kent County, Michigan.
PFAS are often referred to as the ‘forever chemicals’ because of their extreme persistence in the environment, PFAS are a group of over 4,700 industrial chemicals, widely used in everyday products from food packaging, toiletries and non-stick cookware to clothing and carpets. The PFAS used in our everyday products leak into the environment during production, use and disposal, and now contaminate water air and food.
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3M (MMM) share price chart
A history of scandals
‘Forever Chemicals,’ are linked to a host of health hazards, including cancer. In 2018, the residents of Kent County filed a lawsuit alleging that 3M (MMM) had manufactured a PFAS-based water-repellent chemical, known as Scotchgard. The footwear manufacturer Wolverine (WWW) used this to then teat leather and dumped the toxic wase into disposal sites, which then contaminated the drinking water and soil.
The ‘Forever Chemicals’ scandal stretched so far and wide that it even came to Europe, where farmers in Belgium reported that the soil on their land was saturated with PFAS.
This latest disaster by 3M (MMM) is only adding to the company's misery. It is also defending accusations from the US military that the group sold defective earplugs and now two veterans are reportedly suing 3M to block a planned spin-off, which may lead MMM to cut its dividend.
According to Reuters, the veterans claim that 3M’s earplugs failed to protect their hearing during combat and training.
3M’s share price has been down 35% this year as it faces more than 230,000 lawsuits from military veterans who complained about its Combat Arms Earplugs Version 2, which left many service members with tinnitus and hearing loss.
The litigation, which started back in 2018, after a whistle-blower filed a lawsuit against 3M revealing allegations that 3M and its subsidiary, Aearo Technologies had knowingly sold defective dual-ended Combat Arms earplugs to the United States Military. This case resulted in a $9.1m settlement with the Department of Justice.
Wolverine World Wide (WWW) share price chart
Is bankruptcy on the cards?
On 20 May 2022, a jury in Penscola, Florida ordered MMM to pay $77.5m to a US Army veteran named James Beal, who claimed he had suffered hearing damage due to the earplugs.
Testifying before the court in August, corporate solvency expert J.B. Heaton said the lawsuits could force 3M into bankruptcy.
“It is more and more likely within the next several years we’ll see a 3M bankruptcy,” Heaton said before the court, according to reporting from Bloomberg.
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